A facial recognition system developed by Tsinghua Unigroup at the first Smart China Expo in Chongqing on August 23, 2018. Unigroup defaulted on a US$450 million keepwell-backed bond. Photo: Reuters
Shanghai court’s nod to Hong Kong ruling on keepwell clause bodes well for offshore creditors of defaulting Chinese bonds
- Keepwell clauses are undertakings by Chinese companies to guarantee the solvency and financial well-being of their units when they sell bonds in offshore markets
- First seen in 2012 before China developed a tolerance for such guarantees, keepwell provisions were the workarounds that helped companies raise capital
A facial recognition system developed by Tsinghua Unigroup at the first Smart China Expo in Chongqing on August 23, 2018. Unigroup defaulted on a US$450 million keepwell-backed bond. Photo: Reuters